Step 1: Identify the time reference of the sentence. The action is described as taking place in the future and is related to another future event introduced by the time clause “when she arrives.” This indicates a future situation viewed from a future point in time.
Step 2: In such contexts, both the affirmative and the negative forms of the future continuous tense can be grammatically acceptable. The choice between them depends on the speaker’s intention or assumption about whether the action will be in progress at that future moment.
Step 3: Since the question focuses on grammatical correctness rather than certainty of meaning or intention, it allows for more than one grammatically valid option. Therefore, the correct answer is (D).